Inflationary tax and the mechanism of its operation

Quite often, residents of countries that have arisen in the USSR's place have to face the problem when their accumulations lose their value due to the development of inflationary processes. They are characterized by the category of inflation tax. Its peculiarity is manifested in the fact that the appropriation of this tax is predetermined by the issuing center that caused it. Since today the emission centers are created, controlled and managed by the state, this tax can also be considered a hidden tax, which is not established as an institutional phenomenon.

The mechanism of its operation is such that the inflationary tax is more influential on the poorest and middle layers of society, and less on the rich. This is due to the fact that the former have incomes that come to them in the form of wages, benefits, that is, those that are fixed in size. Sometimes it happens that the rate of increase in inflation simply does not allow you to index the income of these groups of the population. In this case, many economists characterize the inflation tax as regressive, that is, whose rate becomes smaller as the physical magnitude of income increases.

The nature of this tax is as follows. As the new money masses are printed for any purpose, for example, in order to create the appearance of good economic incomes in society, inflation begins to increase in the economic system. Its most manifested sign is a significant increase in the amount of money in circulation and, in fact, this condition forces everyone who has money to pay an inflationary tax.

Thus, virtually all governments in the world are debtors, because they constantly need more than they owe. Inflation, as it were, smooths out this debt, that is, makes the previous debt not as noticeable and memorable as acting at that particular moment in time, but at the same time revenues from tax revenues increase. It turns out almost paradoxical situation, when the government has the opportunity to improve the ratio of debt to income precisely by such a destructive phenomenon for the population as inflation. Nevertheless, if the authorities continue to pursue a policy of borrowing money and selling debts for any debt obligations and at the same time continue to issue money, this money will lose its purchasing power and will no longer be claimed by creditors. It should also be taken into account that such a tax does not always have the nature caused by the issue.

Another feature of the inflation tax is that it is not collected by specially created bodies that form the tax system of the state. Its collection does not require such a special apparatus, and it goes directly to the budget.

In other cases, other taxes are levied by specially authorized bodies or by persons who collect taxes. According to the current legislation in the Russian Federation, such are state bodies of executive power, executive committees of local self-government, as well as other bodies and individuals authorized by them. These tax collectors, in addition to collecting taxes themselves, also act as supervisory authorities, whose competence includes control over the completeness and timeliness of payment. Do not confuse tax collectors with tax agents. The main difference is that the collectors keep taxes only from the direct ones stipulated in the law.

Taxes of banks are another special tax group. Under the laws of the Russian Federation, they are paid by commercial banks, as well as by other credit institutions that have received the appropriate license. Issuance of such licenses is in the competence of the Central Bank of Russia. The object of taxation when levying this tax is the income of banks, such as interest on loans, fees for the provision of credit resources and other operations.